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Environment

Hydrogen Power: Dwindling Prospects amid Electrified Transit Shift

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Robert Tavares

April 4, 2024 - 11:52 am

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Hydrogen's Hurdles: The Dimming Dream of a Fuel Cell Future

In the verdant stretches of California's Marin County, drivers dependent on sustainable transportation find themselves relying on a solitary hydrogen fueling station. The image of a lone supply point for eco-conscious motorists — once a symbol of a green future — now stands as testament to the waning fortunes of hydrogen fuel cell vehicles in a market rapidly shifting towards battery-electric alternatives.

Mary Nichols, recognized as an environmental pioneer during her term as the chief climate regulator of California, once ardently advocated for hydrogen fuel cell cars. A few years back, when the "hydrogen highway" of fueling stations was still a burgeoning project funded by millions of dollars, Nichols sang praises of her own fuel cell car, a Toyota Mirai, which boasted a 300-mile range and quick refueling capabilities. Today, Nichols's automotive choice has shifted to a battery-electric Ford Mustang Mach-E, which similarly offers a 300-mile range. While she doesn't dismiss another foray into hydrogen, Nichols perceives battery-powered vehicles as the more sensible current option, believing that hydrogen cars will not experience widespread adoption unless for heavy-duty use, where the transport of considerable loads is paramount.

Despite the massive financial efforts poured into it, the American market for fuel cell vehicles is struggling to keep pace, hindered by scarce hydrogen supplies and escalating fuel costs. California, the sole state selling hydrogen cars, witnessed a meager sales total of 3,143 units last year, a stark contrast to the 380,000 battery-electrics purchased.

The proponents of hydrogen energy refuse to concede defeat. Automotive giants like Toyota and Hyundai continue marketing their fuel cell models — albeit with steep discounts — and even Honda has introduced a hydrogen hybrid version of its CR-V. California remains steadfast in constructing new infrastructure; nevertheless, for those considering hydrogen-electric vehicles, the promise proves increasingly impractical.

David Reichmuth, a senior engineer specializing in clean transportation at the Union of Concerned Scientists, has observed the clear victor in the marketplace. He contends that to hasten the transition to a decarbonized transport sector, the readily available infrastructure for plug-in electric vehicles offers the most expedient path.

Hydrogen fuel cells produce electricity from compressed hydrogen gas, an innovation stemming from the 1990s when California challenged the auto industry to combat smog. This push heightened post the state's historic 2006 climate law, mandating substantial reductions in greenhouse gas emissions.

Reminiscing about the nascent stages of hydrogen cars reveals their bespoke beginnings — from driving a $1 million prototype Mercedes fuel cell car in 2006 to witnessing Honda, Hyundai, and Toyota venturing into commercial sales once California invested $20 million annually in a network of hydrogen stations, spurred by a 2013 legislation targeting 100 refueling points.

As Governor Jerry Brown aimed for 200 hydrogen stations by 2025 — backed by nearly $257 million in commitments — Shell Plc reneged on a $41 million grant for 50 stations in 2022. Consequently, California reduced its sights to 130 stations by 2027. In early 2022, amidst a deflating commitment, Shell closed six of its seven California locations. Currently, drivers have access to 66 stations, with 12 suffering extended outages and others facing intermittent issues.

Comparatively, California can boast over 105,000 charging points for plug-in vehicles. Last year, battery-electrics constituted 21% of the state's new car sales with Tesla leading the market. In contrast, hydrogen fuel supply problems are significant, with downtimes being a norm; real-time data showed that on April 2, 2023, 16 out of 54 operational stations across the state were nonoperational. Southern California, in particular, feeling the pinch from Shell's retreat, frequently has around half of its stations out of service.

Moreover, extensive closures and downtimes across California leave hydrogen car owners in a bind as they search for operational refueling options. Social media platforms reveal the growing discontent and the woes of stranded drivers and skyrocketing fueling costs. Filling a hydrogen vehicle in California can cost around $200, equivalent to paying astronomical gas prices of $14.60 per gallon. Complaints about the prohibitive costs are not uncommon, with some voicing frustrations about the upkeep resembling that of owning an inefficient "monster truck."

The disillusionment with hydrogen is deepening among even its enthusiasts. Documentary film editor Tina Imahara, influenced by working on environmental documentaries, proudly owned a 2017 Mirai. Yet, despite the initial enthusiasm and planning required to manage the lengthy distances between stations, the steep price of hydrogen forced her to switch to a battery-electric Toyota bZ4X SUV when her complimentary $15,000 fuel card got quickly depleted.

A decade earlier, the stage seemed set for a hydrogen revolution. I recall visiting Honda in Torrance, California, and being mesmerized by the FCX Clarity's capabilities. It offered a 240-mile range at a time when most battery-electrics could travel merely 80 miles. After effortlessly refueling at a nearby Shell station, the hydrogen car seemed poised to transform the industry.

Today, however, the landscape has shifted dramatically. As Honda ceases production of the Clarity, its focus turns to the 2025 Honda CR-V e:FCEV, a compact SUV with both battery and hydrogen cell power, promising a range of 270 miles and the ability to drive 29 miles solely on battery power.

Auto manufacturers are cautiously balancing on the fence regarding hydrogen. Hyundai's Nexo SUV offers up to 380 miles per tank, but only a few hundred units were sold in California last year. Meanwhile, Toyota stands by hydrogen power, celebrating the sale of over 14,000 Mirais since 2015, which achieve up to 400 miles per refill.

However, enticing deals on fuel cell vehicles paint a different portrait of customer demand. Toyota dangled as much as $40,000 cashback for a new Mirai, effectively cutting down the cost to approximately $9,500. Hyundai's Nexo, though listed at $63,585, was available for $28,585, and a pre-owned 2020 Mirai in San Francisco could be yours for around $12,000.

Despite the struggles, California's commitment to hydrogen as an energy source endures. It continues to pour millions into infrastructure and hydrogen production, which includes electrifying heavy-duty trucks — an application where hydrogen's lighter powertrain offers significant advantages.

The state's green ambitions persist, extending to the hydrogen itself. A push is underway to transition from gray (natural-gas-derived) hydrogen to green hydrogen, generated via electrolyzers powered by renewable electricity.

While the future of hydrogen-powered vehicles aligns with California's pioneering environmental efforts, significant strides are necessary to bridge the gap with their battery-electric counterparts. Superfans like Imahara remain hopeful, convinced that price reductions and a domestic production boost could revive interest in the hydrogen highway.

The larger narrative, set against the backdrop of a global push for sustainable energy, keeps hydrogen as a vital player in the future energy mix, highlighting its potential roles in various sectors, including backup power and transportation segments difficult to electrify directly, such as trains, planes, and heavy-duty trucks.

While the journey toward a hydrogen-driven transportation sector faces challenges, the state of California and automotive industry leaders hold the course, championing innovation and market adaptability.

For further insights and real-time data on hydrogen fueling station availability, interested readers can visit the Hydrogen Fuel Cell Partnership's website.

©2024 Bloomberg L.P.